Assume for a moment that the then Union finance secretary Ajit Kumar had rushed to the home of then Union finance minister Yashwant Sinha that fateful Saturday morning and appraised him of the state of affairs of the Unit Trust of India. Would things have been any different for UTI and the many holders of its various units? Highly unlikely. The Joint Parliamentary Committee inquiring into the stock market scam of 2001 and the problems facing UTI at the time has wasted tax payers’ money and produced an utterly pedestrian report of little consequence. It is quite shocking that such a high-powered parliamentary committee with luminaries ranging across the political spectrum could muster so little analysis and fail to unearth any facts or recommend any future action beyond what has already appeared in the media. In a democratic system defined by ministerial responsibility, for a parliamentary committee to blame a civil servant for the failure of an entire ministry, assuming there was such a failure, is nothing short of outrageous. This is perhaps the first time in the history of Indian democracy that politicians from all political parties have indicted an official merely because he didn’t carry a letter to his minister two days earlier!Kumar has said on many occasions that he had taken the considered view that bailing UTI out was not the job of the government. The JPC could have questioned his judgement, not the speed with which he approached his minister. What on earth were the other officials in the relevant divisions of the finance ministry doing and why was the finance minister himself not more alert to the goings on in UTI? The ill-informed superficiality of the JPC report is an indictment of the JPC itself.Additionally, it is well known that a bear cartel was operating in the stock market with impunity and that the Reserve Bank of India and the Securities and Exchange Board of India had failed in crucial aspects of their supervisory and regulatory functions. This much has already been written about and acknowledged. What new idea has the JPC presented? The core of the problem, namely the nexus between stock brokers, corporates and banks, is the same issue that an earlier JPC had inquired into, after the bull run in the early 1990s. It was Harshad Mehta then, it is Ketan Parekh now. Just as the earlier JPC report made no difference to this nexus, this too will have little effect. The only way to eliminate such stock market scams is quick exemplary punishment handed out by autonomous regulatory institutions.
